When Trying to Estimate the Purchases of a Potential Business

question 113

True/False

When trying to estimate the purchases of a potential business customer, it is reasonable to suppose that there is a relationship between the size of the potential customer's purchases and a variable such as the number of personnel employed by the customer.

Calculate partnership equity and understand the implications of partnership agreements on these calculations.

Apply the concept of goodwill and the bonus method in partnership accounting.

Identify different legal forms of partnerships and their characteristics.

Understand the procedures and effects of partner withdrawals on partnership accounting and capital balances.

---

Definitions:

Proxy Statement

A document containing the information that a company is required by law to provide to shareholders to solicit proxies for voting at a shareholder meeting.

Affirmative Covenants

Provisions in a loan agreement requiring the borrower to undertake certain actions or meet specific conditions.

Negative Covenants

Restrictions in loan agreements that prohibit certain actions by the borrower, intended to protect the interests of the lender.

Debt Covenants

Conditions imposed on borrowers by lenders as part of a loan agreement to protect the lender’s interests by restricting the borrower’s actions.